Quotes at time of story, top stories today:
The industrials sector is trading +0.4 versus the S&P 500 +0.4%.
In earnings: ROLL +4.9%, CMCO -2.5%, VLNC -7.2%.
In broker news: AGCO +3.4% (AGCO Corp upgraded to Buy from Neutral at UBS),
CNH +3.0% (CNH Global upgraded to Buy from Neutral at UBS), WCC +1.9% (Wesco
upgraded to Strong Buy from Outperform at Raymond James), CHRW +0.2% (C.H.
Robinson target raised to $90 at RBC Capital Mkts after meeting with mgmt), INXN
-0.1% (RBC maintains overweight stance on datacenters; firm believes ongoing M&A
HEI -1.3% (HEICO downgraded to Hold from Buy at Capstone), KNX -0.2% (Knight Transportation downgraded to Neutral from Buy at Longbow).
In sector news: FSIN +12.5% (Fushi Copperweld special committee provides
update regarding 'going private' proposal; Committee and its independent
advisors are currently facilitating the due diligence investigation of the Co),
STP +3.1% (Suntech Power announced strategic partnership for supply of up to
190MW of solar panels to solarhybrid in 2011).
SAVE +2.2% (Spirit Airlines prices 15.6 mln share IPO at $12.00, at the low end of the revised $12-13 expected range (prior $14-16)), CBI +1.6% (CB&I awarded a contract valued at approximately $150 mln by Nexen Petroleum for the detailed engineering of two fixed platforms for the Golden Eagle field in the U.K. sector of the North Sea), ITT +0.9% (ITT Industries offers field-tested lightweight countermeasures system to protect U.S. Military aircraft from ground-based missile threats).
LMT -0.6% (Lockheed Martin selected to build spacecraft for NASA), DAC -3.2% (Danaos to sell 23,945,945 mln shares of common stock for shareholders), XUE -4.0% (Xueda Education Group is considering a proposed public offering by its pre-IPO shareholders; The offering will only consist of secondary shares to be sold by certain of XUE's pre-IPO shareholders).
The tech sector is trading just higher today, ahead of slight losses in the broader market. Semiconductors are showing relative weakness in the tech space with the Philly Semi Index trading 0.2% lower. Among chips in the index, AMAT (-2.1%) is a notable laggard. Among other major indices, the S&P 500 is trading 0.2% lower while the NASDAQ is trading 0.2% higher. The QQQ is also trading 0.2% higher. Among tech bellwethers, MSFT (+2.1%) is showing strength, while INTC (-0.8%) is under pressure.
In earnings last night, NTAP (+8.0%) reported a beat and raise. Also last night, CSC (-14.2%) reported a slightly lower than expected Q4 with in-line guidance and SIGM (-16.5%) posted a miss.
In news, MAIL (0.0%) announced that it has integrated Facebook into its email product. Also, FSL (+5.2%) opened for trading after pricing IPO at $18 vs. $22-$24 expected price range.
In rumors, we are hearing renewed STEC (+1.6%) takeover chatter making the rounds.
Among the more notable analyst upgrades this morning, NTAP (+8.0%) was upgraded to Outperform at BMO Capital and ORCL (+0.7%) was upgraded to Buy at ThinkEquity.
In downgrades this morning, CAVM (-1.1%) was downgraded to Hold at ThinkEquity and CSC (-14.2%) was downgraded at Barclays.
MRVL (+0.2%) is the notable tech name set to report results today after the close.
Tiffany (TIF $76.25 +6.21) reported first quarter earnings of $0.67
per share, excluding non-recurring items, $0.10 better than the Thomson Reuters
consensus of $0.57.
Revenues rose 20.1% year/year to $761 million versus the $704 million consensus.
In the fiscal year 2012, the company raised its earnings guidance to $3.45 to $3.55 versus the $3.33 Thomson Reuters consensus, up from $3.35 to $3.45, with a mid teens percentage increase in net sales vs. the +11.4% consensus, up from +12-14%.
Guess? (GES $44.80 +4.70) reported first quarter earnings of $0.55 per
share, excluding non-recurring items, $0.11 better than the Thomson Reuters
consensus of $0.44.
Revenues rose 9.8% year/year to $592 million versus the $567.7 million consensus.
For the second quarter, the company issued earnings guidance of $0.77 to $0.83 versus the $0.79 Thomson Reuters consensus and sees revenues of $645 million to $660 million versus the $650.48 million Thomson Reuters consensus.
In fiscal year 2012, the company expects earnings of $3.30 to $3.50 versus the $3.40 Thomson Reuters consensus and narrowed revenues guidance to $2.74 billion to $2.80 billion versus the $2.76 billion Thomson Reuters consensus, from $2.72 billion to $2.82 billion consensus.
After declining for two consecutive weeks, the initial claims level unexpectedly reversed directions. The initial claims level increased from 414,000 for the week ending May 14 to 424,000 for the week ending May 21. The Briefing.com consensus expected the initial claims level to decline to 400,000.
End-of-quarter volatility and poor seasonal adjustments were to blame for the four-week increase in the initial claims level from 385,000 for the week ending April 2 to its April 30 peak of 478,000.
The DOL has stated that there were no unusual factors in the initial claims report since the May 7 data. We expected claims to fall back to 380,000 within three weeks of the end of the seasonal adjustment problems.
If claims remain elevated next week, which would be the fourth week without seasonal adjustment problems, it may suggest that the labor market recovery is weakening. If this is the case, payroll growth in excess of 100,000 cannot be guaranteed and the unemployment rate may creep higher.
The continuing claims level declined from 3.736 million for the week ending May 7 to 3.690 million for the week ending May 14. The Briefing.com consensus expected continuing claims to fall to 3.700 million.
Real GDP growth in Q1 2011 was unchanged in the second estimate. GDP increased 1.8% during the quarter after increasing 3.1% in Q4 2010. The Briefing.com consensus expected GDP to increase 2.0%.
Increases in exports, nonresidential fixed investment, and inventories were completely offset by an increase in imports and a downward revision to personal consumption expenditures.
The downward revision in consumption was unexpected as the latest retail sales report suggested stronger sales numbers. The consensus expected an upward revision to PCE would push GDP growth higher in the second estimate.
Even though overall GDP growth remained the same, real final sales weakened in the second estimate. Real final sales increased only 0.6%, down from 0.8% in the advance estimate and from 6.7% in the fourth quarter.
Real final sales are at their lowest point since Q3 2009, which was the first quarter after the recession ended. On this measure, economic activities were definitely depressed during the quarter as inventory changes represented the bulk of GDP growth. This is not sustainable and the volatile nature of the inventory data suggests inventories will reverse direction next quarter.
The GDP deflator was also unchanged, remaining at 1.9%.
NetApp (NTAP $55.54 +3.81) reported fourth quarter earnings of $0.59
per share, excluding non-recurring items, $0.06 better than the Thomson Reuters
consensus of $0.53.
Revenues rose 21.8% year/year to $1.43 billion versus the $1.39 billion consensus.
For the first quarter, the company Co issues upside guidance for Q1, sees EPS of $0.52-0.57, excluding non-recurring items, versus $0.50 Thomson Reuters consensus; sees first quarter revenue of +26-34% year/year, which calculates to approx. $1.43 billion to $1.52 billion versus $1.4 billion Thomson Reuters consensus.
"NetApp delivered 30% revenue growth, 38% growth in cash from operations and over $1B in non-GAAP operating profit during fiscal 2011. We achieved the largest market share gains in our history and closed a record number of million dollar deals, demonstrating our momentum in the market as enterprise customers increasingly choose NetApp as their vendor of choice for storage virtualization and cloud deployments."